Main Menu

Meet New Greek Finance Minister Euclid Tsakalotos

Now that Yanis Varoufakis has metamorphosed from economist academic to controversial finance minister to political martyr (a transition he punctuated Monday morning by proclaiming he will henceforth “wear creditors’ loathing with pride”), the eyes of the financial universe will turn nervously to newly-appointed Finance Minister Euclid Tsakalotos who has led Greece’s negotiations with creditors since Varoufakis was sidelined after making a scene at an April Eurogroup meeting in Riga.
Here’s more on Tsakalotos from The Telegraph:

An Oxford-educated economist, Mr Tsakalotos has much in common with the political elite of Westminster, having been educated at St Paul’s school, before going on to read politics, philosophy and economics (PPE) as an undergraduate. He later completed his PhD in economics from Oxford in 1989.

The 55-year-old, who was born in Rotterdam, served as the chief economic spokesman and effective shadow finance minister for the Syriza-led government.

Unlike Mr Varoufakis, Mr Tsakalotos is no party outsider. He has been a member of Syriza for nearly a decade, serving as an MP in the Greek parliament since 2012.
Like many of his fellow Leftist parliamentarians, Mr Tsakalotos’s background is as a jobbing Western academic rather than a career politician, having taught at the universities of Kent and Athens.

Described as the “brains behind Syriza’s economic policy”, he has authored and co-authored six books, the most recent of which seeks to debunk the causes of Greece’s economic turmoil.

Published in 2012, Crucible of Resistance: Greece, the Eurozone and the World Economic Crisis, argues that far from being an economic laggard, Greece underwent two decades of neo-liberal modernisation before the onset of the financial crisis in 2008. The result, he argues, was a widening in social inequality and a gaping democratic deficit.

In a refrain that will be familiar to many, the Marxist economist diagnoses Greece’s ailments as not simply the consequence of “an economic crisis” but a “crisis of democracy” in the eurozone.

But far from advocating a “Grexit”, as some of the more radical elements within Syriza, Mr Tsakalotos thinks Greece should maintain its membership of the euro.

Greek Prime Minister Alexis Tsipras is counting on a change of style, if not necessarily substance, by turning to a longtime ally to seek a new deal with creditors to keep his nation in the euro.

Euclid Tsakalotos was named finance minister to replace Yanis Varoufakis, who resigned Monday after more than five months of fruitless back and forth. An Oxford-educated economist who was deputy foreign minister, Tsakalotos had already begun to take a leading role in debt talks before
Tsipras’s surprise referendum call brought them to a halt on June 27.

Tsipras is betting that a new, less confrontational face will help him bring German Chancellor Angela Merkel and other European leaders back to the table after Greeks voted to reject further austerity in Sunday’s vote. Varoufakis had vowed to “cut off my arm” rather than sign a bad deal.

“It’s an important symbolic and necessary move,” Famke Krumbmuller, an analyst at political consultancy Eurasia Group, said by e-mail. Creditors “now really need to see the trust restored by a serious and credible commitment from the Greek side to implement reforms,” she said.
Tsakalotos has been described by some as one of the more “sensible” members of Syriza which has led a few commentators to suggest negotiations will move forward quickly with Varoufakis now formally out of the picture.

Still, it’s not clear that the transition will mark a turning point as should be abundantly clear from the rhetoric out of Berlin on Monday which certainly seems to suggest that regardless of who is doing the negotiating, the idea of debt writedowns is simply unacceptable and thanks to the IMF, any “deal” which does not include debt haircuts will be a non-starter for Greece. In other words: the stalemate will persist.